In Egypt, in 1970, the Aswan Dam was completed.By preventing the annual flood of the Nile (thereby providing millions of acres of arable land) and by providing electricity, the dam was expected to raise the living standard of the Egyptian people-and it has.However, it has also led to a rise in the water table, which causes Egypt's limestone structures, including the pyramids, to absorb more salt water and to suffer serious erosion from crystallized salts.Combined with air pollution and traffic vibration, this erosion is turning the pyramids to dust.Economists analyze this type of problem with the concept of

Question

Quizplus · Accepted Answer

The negative impact of the Aswan Dam on Egypt's historical structures such as the pyramids is an example of an externality. An externality is an unintended consequence of an economic activity that affects third parties who are not part of the transaction. In this case, the benefits of the dam (increased arable land and electricity) are enjoyed by the people of Egypt, but the negative impact on the pyramids is not factored into the decision-making process.

In Egypt, in 1970, the Aswan Dam Was Completed